Needham & Company Comments on New Products from LeapFrog (LF)

June 25, 2013 8:23 AM EDT
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Needham & Company reiterated a Hold on LeapFrog (NYSE: LF) following the unveiling of several new products for the upcoming holiday season.

Analyst Sean McGowan comments, "LF yesterday unveiled several new products for the upcoming holiday season, including a new LeapPad2 SKU at $100 that includes a rechargeable battery, and LeapPad Ultra, a $150 “deluxe” model of the popular kids’ tablet that features a larger, higher resolution screen, wifi, “peer to peer” capability, and a longer-life rechargeable battery. The effect of these and other new products is to broaden the price range for LF’s key products. Gross margins on these devices are likely to be tighter than the current margins on LeapPad2, but if the net effect is an increase in content and accessory sales, overall margins should benefit over time. We are maintaining our estimates and Hold rating. We believe the new products are not likely to have much near-term impact on investors' view of LF's prospects, but believe that if LPUltra sells well, it could lead to higher sales, margins and EPS."

For an analyst ratings summary and ratings history on LeapFrog click here. For more ratings news on LeapFrog click here.

Shares of LeapFrog closed at $9.63 yesterday.

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